The new regulations are designed to help its lenders to assist a larger number of home buyers.
Genworth Financial Inc’s U.S. Mortgage Insurance (USMI) unit, released a statement that said that it will be making a number of adjustments starting on May 14, 2012, which will decrease prices and broaden the underwriting guidelines to help to lower the mortgage insurance costs for most of the mortgage loans that are offered to customers by the lenders.
The changes will help more borrowers to qualify for standard mortgage loans.
They will also allow lenders to offer more borrowers loans that will include affordable down payments of under 20 percent of the purchase price of the home. The primary adjustments will involve a reduction in the monthly premiums that are paid by both borrowers and lenders on mortgage insurance for borrowed amounts that have a loan-to-value ratio of less than 95 percent.
Moreover all home loans to borrowers whose FICO credit scores are lower than 760 will qualify for new and reduced coverage rates. Genworth has also unveiled its new mortgage lender rates, which have been decreased both on the single premium and monthly payment plans in the case of borrowers who are higher than 760 on their FICO credit scores.
Mortgages that have 95 percent or higher loan-to-value ratios will not see any changes in their mortgage insurance premiums.
The new minimum acceptable FICO credit score at Genworth will now be 700 under the new guidelines, for loans that have a 41 to 45 percent debt-to-income level, and the new regulations will cut out the distinctions among third party lender and retail originations, while widening the eligibility for cash-out refinancing for condos.
Genworth will also be providing mortgage insurance on loans that suit its qualification guidelines for evaluation of consumer financial reserves and trade lines from the popular automated systems of underwriting by the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae). These changes will allow a larger number of loans from those underwriting systems to meet eligibility requirements, giving the company the opportunity to serve a larger number of prospective home buyers.